In business, a top customer is a very important relationship, one that requires careful tending and cultivation to maintain. The best business relationships are two-way streets, with each party tending to the other’s needs with care. These are simple principles for successful commerce — but they also seem to have been forgotten in the European Union (EU) when it comes to dairy.
The U.S. is one of the EU’s top food and agricultural export markets; in dairy alone, it shipped an eye-popping $2.7 billion of cheese, butter, food preparations, and other dairy products to America. This year it’s on track to top that record, with sales through July up 12%. The U.S. is a major and lucrative market for the EU’s dairy industry and other food sectors.
With all that on the line, it would be reasonable to expect the EU to prioritize U.S. trade concerns. Instead, the EU is increasingly seeking to use trade policy to dictate to the world — including American dairy farmers — how to farm and, while serving its own self-interest, how to properly produce products.
National Milk Producers Federation (NMPF) and U.S. Dairy Export Council (USDEC) staff met last week with the EU’s Health and Food Safety Agency on one of the EU’s latest policies advancing that goal. Article 118 is a rule slated to impose new restrictions on which veterinary medicines EU trading partners can use for any products destined for the EU. Given the interconnected nature of milk flows in the U.S., however, requirements for EU shipments can impact a much wider swath of U.S. production to avoid disrupting supply chain flexibilities.
In that meeting, NMPF and USDEC, together with the other U.S. agricultural organizations, strongly objected to the EU imposing its domestic farm process steps on American farmers. We also pointed out the importance of a two-way relationship: The EU relies on the United States continuing to reliably import billions of dollars of EU products that are produced in keeping with EU farm process requirements, not American ones.
NMPF staff, working closely with our partners at USDEC, has engaged with the U.S. government, other agricultural sectors, and the EU itself for the past few years in trying to shape the implementation of this regulation. Thanks to that extensive investment in staving off the worst edges of this ill-conceived EU policy, U.S. dairy exports aren’t expected to be affected by the initial list of targeted veterinary medicines. But what’s true today may not be tomorrow. NMPF continues to work on this issue to guard against any future inclusion of more broadly used safe veterinary medicines down the road.
Article 118 is just one of many policies the EU is pushing to foist its farming preferences onto the world’s farmers. Issuing specific animal welfare standards for trading partners is also under development, even though U.S. dairy farmers know how to farm safely and hold high standards while exporting to more than 100 markets worldwide. European bureaucracy does nothing to elevate the quality of U.S. dairy products, but it does risk exacerbating trade tensions.
Because of this growing EU tendency to attempt to serve as a global regulator, NMPF is encouraging the U.S. government to look more strategically at the U.S.-EU agricultural trade relationship. Every customer has its breaking point, and the U.S. should make clear to the EU that we are no different. The trans-Atlantic partnership between U.S. and EU interests is one of the world’s most important. But all good relationships are based on care and respect. We in dairy are urging the EU to tend its trade relationship with the U.S. more carefully, because if they don’t, the consequences will be pleasant for no one.
